United Airlines Seasonal Shift
And, Gitlab plunges on bad outlook.
Today is Tuesday, March 14, 2023.
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United Airlines Seasonal Shift
Shares of United Airlines Holdings (Nasdaq: UAL) dropped by 6.92% in after-hours trading on Monday after the airline company posted a financial update.
Details: The company now expects to post a loss per share between $0.60 to $1 in the current quarter due to a new collection bargaining agreement with the pilots.
But: Overall strong demand is allowing United Airlines to push revenue projections higher. United Airlines now expects total operating revenue to go up by 51% in the quarter instead of 50%. Capacity is also expected to grow by three points to a 23% increase.
Powering the News: The problem is that United Airlines said it is “observing new seasonal demand patterns, with lower-demand months such as January and February 2023 growing less than higher-demand months.” As a result, United Airlines expects its total revenue per available seat mile to increase at a lower rate. But the outlook for the following quarter has improved.
Feeling the Pain: Other airline stocks also dipped in after-hours trading because of the news. American Airlines Group (Nasdaq: AAL) dropped by 1.35% and Delta Air Lines (NYSE: DAL) dropped by 1.40%.
Final Thoughts: The travel industry has been a solid bet for the past year for investors due to strong travel demand that included “revenge travel,” which is for making up lost time during the pandemic. But this news from United Airlines means that travel demand might be seasonal instead of all year.
Notable Earnings Today: Lennar (NYSE: LEN), Blade Air Mobility (Nasdaq: BLDE), StoneCo (Nasdaqw: STNE), Agenus (Nasdaq: AGEN), JJill (NYSE: JILL), SentinelOne (NYSE: S), Kopin (Nasdaq: KOPN), Hagerty (NYSE: HGTY), Smartsheet (NYSE: SMAR), Caleres (NYSE: CAL), BRT Apartments (NYSE: BRT), Ondas Holdings (Nasdaq: ONDS), Snap One Holdings (Nasdq: SNPO), Axogen (Nasdaq: AXGN), Guess? (NYSE: GES), IHS Holding (NYSE: IHS), Custom Truck One Source (NYSE: CTOS), McEwen Mining (NYSE: MUX), Beachbody Company (NYSE: BODY).
Notable IPOs Today: Mars Acquisition Corp. Ordinary Shares (Nasdaq: MARX).
Notable Equity Crowdfunding Campaigns Ending Today: Cannecht (StartEngine), MySky ECO (StartEngine), Bowr (Republic), Harvie (Honeycomb).
Notable Economic Events Today: OPEC Monthly Report (7:00 a.m. ET), Consumer Price Index (8:30 a.m. ET), API Weekly Crude Oil Stock (4:30 p.m. ET).
Gitlab Plunges Due to Poor Outlook
Despite good financial results from Gitlab (Nasdaq; GTLB), shares dropped by 31.84% in after-hours trading on Monday.
Financials: Gitlab reported a loss of 3 cents per share in the past quarter and revenue of $122.9 million; both were better than expected.
Outlook: The problem with Gitlab was the guidance. The company expects revenue in the current quarter to be $117 million to $118 million and for the full year to be between $529 million to $533 million. Investors were expecting more.
Stock Price: Gitlab is up 34% in the last 12 months, but is down by 5% in the last 30 days.
Final Thoughts: Gitlab is confident in its DevSecOps platform and recently raised prices. But the fact that the company has a lower revenue projection is not what investors were expecting.
Bitcoin Jumps in Wake of Banking Collapse
The price of Bitcoin jumped 8% on Monday, surpassing $24,000 in value, thanks in part to federal regulators jumping in and protecting depositors of the collapsed banks.
Final Thoughts: Another catalyst for Bitcoin on Monday was the launch of Bitcoin future events contracts. Believe it or not, a few investors see Bitcoin (which is still volatile) as a safe asset compared to banks.
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Trends to Watch
Soaring High: Boeing expected to sell nearly 80 787 planes to Saudi airlines (Reuters)
Distortion: Bitcoin futures premium falls to lowest level in a year, triggering traders' alerts (Cointelegraph)
All is Good: Biden emphasizes US banking system is safe after Silicon Valley Bank collapse (CNN)
Steady: Some economists expect Fed to keep interest rates unchanged amid Silicon Valley Bank crisis (USA Today)
Protection: Investors Are Searching for Safe Spaces in Banking (The Wall Street Journal)
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